Self-Employed Taxable Grant

coronavirus business

Announced tonight at 5pm, Thursday 26 March 2020, the Chancellor of the Exchequer offered COVID-19 aid to the self-employed.

What?

A taxable grant for self-employed or freelancers to be set at:

  • 80% of their monthly profits, averaged over the last three years up to £2,500 per month.

So, no payment will exceed £2,500 per month.

Who?

Only those who have submitted a tax return to 5 April 2019 are eligible. The Chancellor announced a 4-week period from now to get your 5 April 2019 tax return submitted to be eligible.

When?

Access to the grant is expected to be up and running from 1 June 2020.

Excluded?

The grant is only available for those with taxable profits up to £50,000.

For those newly self-employed they will have to look elsewhere for help, we assume this would be the universal credit system.

Future?

Sounds like changes to self-employed national insurance contributions are to be introduced and aligned with those employed workers pay.

Other

Recently self-employed with less than 3 years accounts the Chancellor said they will look at what they have, but the government must be careful to avoid people fraudulently claiming.

We are sure in the coming days and weeks more details will be revealed as we go through the guidance in more detail, once it’s made available.

Important Note: to avoid confusion, if you are a company director, this does not apply to you, so far there appears to be no help for company directors, we appear to have been overlooked and forgotten about.

Business Rates – Grant Funding Schemes

Finally, there is more detail on the Grant Funding Schemes for small business, retail, hospitality and leisure.

To read the guidance yourself click here.

Small Business Grant Funding

Pretty much what we knew, also it would appear those who have commercial premises on 11 March 2020 with a rateable value between £12,000 and £15,000 will also receive the grant of £10,000, this was a question we had been asked and until now we were uncertain.

There are some exceptions detailed under exclusions in points 20 through 22 of the guidance.

Retail, Hospitality and Leisure Grant Funding

As we already knew, if on 11 March 2020 you had commercial premises with a rateable value of less than £51,000 and would have been eligible for a discount under the business rates Expanded Retail Discount Scheme you will receive a grant of £25,000, again exclusions apply and these are detailed in the guidance in points 25 through 29.

We urge anyone who is unsure to read the guidance and contact their local council, sadly this is not something your accountant has anymore answers on.

Finally, if you have commercial premises and are not registered with your local council for business rates we suggest you do this without delay, they will need proof you were there on 11 March 2020 and this is usually a signed lease.

To recap on a few measures already detailed in our previous postings:

Coronavirus Job Retention Scheme

Employers, there is still little guidance out regarding the Coronavirus Job Retention Scheme, this is where you furlough your staff, we would urge you to talk to your HR advisors on the best way of handling this, many will not have contracts of employment that allow for such a change.

Remember, if you do furlough your staff and pay them 80% of their salary, there is a maximum reimbursement available of £2,500 per employee per month, this will cover the gross salary, employer’s national insurance and employer pension cost.

If you need further guidance you can speak to your accountant, but they may need to refer you to a HR specialist for advice as this is employment law.

VAT

The VAT deferral scheme for VAT payments is automatic but you will need to cancel your Direct Debit, otherwise once you submit your VAT Return HMRC will try to collect payment as normal, so please cancel your Direct Debit if you are taking advantage of the deferral.

Time to Pay

If you can’t pay your tax bills ring HMRC’s dedicated helpline on 0800 0159 559 and make arrangements to spread the payments.

July 2020 Payment on Account

If you can’t pay your July 2020 tax payment, ring the dedicated helpline on 0800 0159 559 and request it be deferred until 31 January 2021 as per the Chancellor of the Exchequers recent speech.

Coronavirus Business Interruption Loan Scheme ‘CBILS’

If you need financial support due to losing revenue or cashflow disruption as a result of COVID-19, apply for the CBILS. More details can be found here.

Many will have already found that the CBILS are not quite as we had all hoped, bank standard lending criteria still applies and as the date of writing a personal guarantee is still required.

Alternatives to Traditional Bank Lending

On a Zoom conference call today with the Institute of Directors, North West, I was asked about alternative sources of funding, so here are some ideas:

Contact us, and we will, together with Capitalise, our chosen partner for funding, search over 100 lenders for the best deal for you.

Try funding options who will allow you to search for the best funding opportunities.

Peer-to-Peer Lending is another source, this is where individuals, businesses and institutions provide an alternative to the banks for funding.

Another one to consider for raising capital is SEEDRS.

We cannot take responsibility for any of the funding options above, we have merely provided ideas for alternatives to the High Street Banks.

If you are a client of Holden Associates and you have any questions about finance please do not hesitate to contact us.

Don’t forget, if you haven’t already to bookmark the government COVID-19 support for businesses webpage.

Another thing that came out of the Zoom conversations with members of the IoD today centered around homeworking and how to deal with it, well as I started off 16 years ago working from home this is probably a bit easier for me than most, here are my tips:

  • Identify what needs to be done every day and do it. Do not make a huge list, be sensible and set yourself a goal of between 5 and 6 hour of purely productive business activity.
  • Set your business hours, now right now like most small firms of accountants we are working very long hours to support our clients, we will not be able to sustain this long term but for the short term, needs must, eventually even we will have to limit our business hours to avoid burnout, do the same. Office hours 9am to 5pm then shut off and walk away until the next day.
  • Use the cloud and all the technology it has to offer, you can share documents with colleagues in Dropbox, Google Drive, OneDrive and many more.
  • Still using the cloud, you can use video conferencing such as Zoom and MS Teams for staying in touch, they work very well.
  • Go to work, by this I mean get dressed, not in a suit, but get dressed, do not work in your PJ’s, it’s not a great look and will not help you mentally, after all you are supposed to be working.
  • Do not sit at your computer for hours on end, aim for 5 to 6 hours and the rest of the time move around. I know we can’t go the shops or pub at this present time, but you can go out into your garden or if you don’t have a garden, current guidance is you can leave your home once a day for exercise, use it and go for a longer than average walk.
  • Set-up a designated space, this space is now your office, make it yours, take ownership, furnish it according to your needs and when in that space you are in work and no longer at home.
  • Stay in touch, stay connected, where you use Zoom, Skype, BT, Mobile it doesn’t matter, but remember to stay in touch, we all need to talk to other human beings, do not become a recluse.

We hope the above give you a few ideas that will help you adjust to home working over the coming weeks.

And finally, whether we are your accountant, or you use another firm, please remember, we are also one of your suppliers, an important one. As demonstrated in this blog, we are spending a lot of our time and resources dealing with the changes the government are bringing in to help you and your business. We are deciphering and reporting them to you, and we are going to be your first port of call for help accessing or implementing government help, but we can only be here if we are paid. Please remember to pay your accountant, after all, without payment your accountant will cease to exist, and then where will you be?

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